By Morgan Dumas and Diti Dumas
After endless outings with your Realtor, viewing dozens of properties that were just not “the one”, you’ve finally found the house of your dreams! Unfortunately, the process is slightly more complicated than finding the ideal property. Outlined below are the most important details of the offer, as well as a few other pertinent items to discuss with your Realtor before beginning the Offer process.
PRICE: The price a Buyer is willing to pay for a specific home after reviewing comparable solds in the area as well as considering if there will be multiple offers.
DEPOSIT: This is usually 3-5% of the purchase price and made out to the “Listing Broker’s Office”. The deposit shows the Buyer’s good faith and will be held in trust by the Listing Broker’s office. It will be applied against the purchase on closing. Occasionally, the listing agent will ask for a “certified cheque” when the offer is accepted.
CONDITIONS: There may be conditions such as “subject to a home inspection” or “financing” that must be satisfied within a specific number of days before the home is sold firm. A home is not really sold until all conditions have been met. Also, have your realtor discuss the possibility of having a “home inspection” done prior to an offer presentation, in the case of multiple offer situations. A “Clean & Condition Free” offer is always the most attractive!
INCLUSIONS/EXCLUSIONS: Anything that is not a fixture must be noted to either stay or go. A fixture is described as anything attached to the house. The inclusions section allows the Buyer to list all the items separate from the property that they wish to be included in their purchase. The Seller must agree with the included items before signing the Offer. The exclusions section lists any fixtures that are attached to the property that the Buyer and Seller have agreed will not be included in the deal, i.e. chandelier in the hallway.
CLOSING DATE: The date that “title” is transferred to the buyer and the actual date the Buyer wishes to move into the property, at which time the Seller must have vacated. This date must be agreed upon by both parties and not fall on a weekend or a statutory holiday. The lawyer will meet with the Buyer on the day of closing or any day prior to closing, pre-arranged by the Lawyer and Buyer, to sign the paperwork.
IRREVOCABLE DATE: The date and time the Offer is considered “alive”. If the irrevocable date passes without acceptance by both parties, the offer is null and void.
SURVEY: This clause in the Offer would state that the Seller will provide the Buyer with an updated or existing survey within a set period of time. The updated survey would reflect additions/changes to the home or property. If outdated, the offer should indicate whether the Seller or Buyer will incur the necessary expenses to obtain a survey, or whether the Buyer will accept the survey “as is”.
CLOSING COSTS: You take possession on closing day.
Your main expenses are:
a) purchase price (less the deposit)
b) land transfer taxes payable to the Provincial and Municipal Governments
c) legal fees
d) moving costs
e) GST for new and renovated housing
f) Any additional adjustments, such as any outstanding property taxes or utilities.
HOME INSURANCE PLAN: Purchasing adequate home owner insurance is very important. Advice from an insurance agent can provide you with answers to any concerns you may have.
HOME PROTECTION PLAN: This is essentially a mini insurance policy that covers basic repairs you may encounter and can be purchased for a nominal annual fee. Your Realtor will assist you in finding the protection plan you need.
Diti Dumas is a Sales Representative with Royal LePage R.E.S. Ltd./JOHNSTON & DANIEL DIVISION, Brokerage. Diti is a regular contributor to the Muddy York Blog. Diti’s website is located at www.ditidumas.com.
Morgan Dumas is an aspiring writer and journalism student from Ryerson University in Toronto.
